Disaster for Cameron as Lib Dems win Eastleigh and UKIP beat the Tories

The PM faces a backlash after the Lib Dems win the by-election and the Tories finish behind UKIP in third place.

UKIP candidate Diane James is joined by party leader Nigel Farage as they celebrate beating the Conservatives to second place in the Eastleigh by-election. Photograph: Getty Images.

Let the Tory crisis begin. The result has just been declared in Eastleigh, where the Lib Dems have won with a reduced majority of 1,771 (4.26%) and where, disastrously for David Cameron, UKIP has finished second. A by-election that Cameron needed to win to convince his backbenchers that their party can achieve outright victory in 2015 has ended with the Tories finishing more than a thousand votes behind Nigel Farage's outfit. Coming second in a constituency where the Lib Dems hold all 36 council seats would have been allowable but to finish third, after a well-resourced campaign, is a terrible outcome.

For Clegg, the result will come as a considerable relief. Had the party lost the seat after earlier leading in the polls, it is his handling of the Rennard scandal that would have been blamed. That the outcome was a comfortable Lib Dem win is proof of the adage that "all politics is local". Voters were more concerned with the proposed gravel pit than they were with the disgrace of Chris Huhne or the allegations against Lord Rennard. Ironically, the result owed much to the "pavement politics" pioneered by the party's former chief executive.

The result is one of the biggest boosts to Clegg's leadership since the formation of the coalition. For once, he goes into his party's spring conference with something to celebrate. By holding Eastleigh in the most unpropitious circumstances, the Lib Dems have upset the assumption that they face wipeout in 2015. The Conservatives' hopes of a majority rest on the belief that they can take as many as 20 seats off Clegg's party (half of the Tories' 40 target seats are Lib Dem-held) but tonight's result significantly undermines that strategy. It is becoming ever harder to see how the Tories will improve on their 2010 performance.

For Labour, which finished a poor fourth, the result is a major disappointment. Having chosen to fight to win, rather than concede the seat to the Lib Dems, it saw its share of the vote increase by a mere 0.22 per cent. The hope was that Eastleigh would demonstrate the progress the party has made in the south, where, outside of London, it holds just 10 seats out of a possible 197. Instead, it has shown how much further it has to go before it can truly claim to be a "one nation" force. The only consolation for Ed Miliband is that the Tories' humiliation means all the attention will be on Cameron.

The big winner of the evening was UKIP, which saw its share of the vote dramatically increase from 3.6 per cent to 27.8 per cent, and finished just 1,771 votes behind the Lib Dems. The party still hasn't won a seat but it is getting closer and many will reasonably ask whether, had he stood, Nigel Farage would now be Westminster's newest MP.